How To Boost Your Retirement Savings At Any Age
Are you thinking about your retirement?
Regardless of the age range you currently fall in, it’s an important question. It was reported in early 2020 that around 70% of Canadians are worried they don’t have enough money saved for their retirement. Since then, issues such the pandemic and rising inflation have likely raised this figure even higher.
If you haven’t put much thought towards retirement in a while, that’s OK! However, you shouldn’t let it go ignored for too long. We’ve got a few tips that’ll help you make some major progress with your retirement savings this year.
QUBER Retirement Boost Challenge
Regardless of where you’re at with your retirement savings journey, we’ve got something for you. We designed the QUBER Retirement Boost Challenge to jump start your fund. Choose to save either $209 bi-weekly or $417 monthly for the next 12 months: you’ll end up with $5000 to put towards your retirement, and we’ll give you a $100 reward! This saving schedule will definitely push you, but once you’re done, you’ll have quite the lump sum to add to your retirement fund.
If saving $5000 this year sounds like a bit of a stretch, there are many other Saving Challenges with slightly lower targets that might better suit your needs. We’d encourage you to pick the largest one you can comfortably afford to participate in, but putting away even just $500 towards your retirement this year is better than nothing!
💡 If you’re looking to get started with a Retirement Boost Challenge, click here to download QUBER.
Save your tax return
Tax season is upon us, and that means refunds are just around the corner. Whether it be splurging on a special item, paying off debt or otherwise, many people have a clear plan for their refund long before they receive it.
This year, we’d instead challenge you to save as much of it as you can and put it towards your retirement savings. Your tax return, like gifts or contest winnings, provide a perfect opportunity to put a considerable amount towards your savings without actually having to make any cutbacks in your day-to-day spending.
Start investing now
If you haven’t started investing yet, now is the time to start. For most people, it’s a critical piece of the puzzle in growing one’s retirement fund and having time on your side is an incredible advantage. The sooner you get into it, the more you stand to gain.
If you’ve never invested or you don’t have a financial advisor to help you make decisions, learning more is the best starting point. Although up to 77% of Canadians have investments, only about one-third of Canadians feel they understand the ins and outs of investing. There are a ton of excellent free resources on the Internet in the form of videos, blogs, podcasts and more, meaning you can tailor your experience to fit your learning style. A quick search of “investing for beginners” will yield an incredible amount of information!
Investing also involves taking on some degree of risk with your money. While it’s smart to make safe choices with your money, low-risk investments naturally yield less than those than involve a bit more uncertainty. After doing your research (or conferring with your advisor), try your hand at taking on a calculated risk. You may find it pays off in a big way!
Start an RRSP or a TFSA
Your retirement savings, like all your goals, needs its own dedicated savings account. This isn’t a pool of money you can afford to accidentally overdraw from or fritter away on small purchases.
As such, think about opening a registered account for your retirement fund if you don’t already have one. For many people, the ideal choice is an RRSP (a registered retirement savings plan) given the tax privileges it allows for. However, if you’re earning less than $50,000 a year, an RRSP may not be the ideal choice for you. This is because RRSP contributions must be from your pre-tax income and meeting a monthly minimum contribution limit on a plan might pull too much from your disposable income. In this case, a TFSA might be a better fit for your retirement savings until moving up to an RRSP makes more sense.
Want to learn more about each type of registered account? Check out TFSA’s: Everything You Need to Know and Everything You Need To Know About RRSP’s.
Be sure you’re taking advantage of all benefits available to you
You’d be surprised at how many people don’t realize their employers are offering more benefits than they thought were available. Particularly if you work for a large employer or enterprise business, it’s worth your time to check in with your HR department and ensure you’re up to speed on whether they provide RRSP contributions or not.
If your employer doesn’t offer benefits that’ll help you grow your retirement fund, it’s worth asking! Your employer is interested in offering a benefits package that you and your co-workers will genuinely use and appreciate – if you’re not using it, they’re wasting their resources. If you communicate that you want an RRSP contribution plan or another benefit that can help you grow your retirement savings (like QUBER!), your employers are likely to take note.
Avoid lifestyle inflation
Lifestyle inflation refers to a phenomenon that occurs when someone increasingly spends more on non-essentials as they start to earn more money. Though they may be earning tens of thousands more per year than when they entered the job market, they still rarely have any money left over due to their spending habits.
While you should still enjoy yourself on occasion, lifestyle inflation can eat up an incredible amount of your income if you’re not careful. There will always be a bigger house, newer car or flashier piece of jewelry that you could purchase: there’s no end to the cycle. Instead, putting your extra earnings towards your retirement while only moderately increasing your spending on extras keeps things balanced and sets you up for a stable future.
Start ASAP!
If you just graduated from university, you’re much less likely to be focused on your retirement fund than someone who’s in their late 40’s. However, that doesn’t mean you should completely forget about it. The sooner you start, the more you stand to gain! Starting when you’re young means you can afford to put less away each pay period, taking an incredible burden off yourself in your later years. Plus, developing the habit of saving specifically for retirement when you’re still young means you’ll be more likely to stay consistent as you age.
If you are in a later stage of life but you’re nervous about if you’ll have enough to retire comfortably, the same holds true: it makes sense to take action as soon as you can. If you’re feeling anxious, speaking to a financial advisor and having your plan assessed by a third-party is a great place to start. Then, it’s time to get saving! You may need to cut back on spending or edit future plans to make it all work, but creating a stable situation for yourself for when you’re not able to work every day anymore should be your top priority.
